Energy costs worries for British business in 2017

By Ken Warner, MD, Energy Renewals

British businesses are worried about energy costs next year and bosses think government policy should focus on driving down bills, according to new research.

Chances are most business people out there agree with the findings of this quarter’s ‘Energy Matters’ from NPower which revealed 62% of manufacturers surveyed are concerned about energy costs as we enter 2017.

Outlining the market in 2017, NPower highlights flexibility as key, rather than cost control, but also points out the growing opportunities there are for businesses to reduce their energy bills. The view is one which continues to gather pace in all quarters of the energy market and certainly regular readers of this blog would recognise it as something which sits at the heart of the Energy Renewals business.

Agility in responding to market conditions as well as storage and the role played by aggregators with the government requesting input as part of a consultation is likely to see a host of changes including regulatory to encourage more take-up of Demand Side Response (DSR) as well as changes to the increase to the Climate Change Levy rate are all on the table in 2017.

In its survey, NPower questioned 100 manufacturing decision makers in companies with 250 or more employees.

Overwhelmingly, energy costs were singled out as having the most impact on their business in 2016 and more than half (57%) want reduced energy costs to be a policy priority in 2017 although, inevitably, the biggest concern, cited by 63%, was the impact of Brexit in 2017. More than three-quarters (76%) of businesses were aware of developments in the sector next year with 87% concerned about changes to European energy policy impacting businesses in 2017.

For business looking to reduce energy costs, the emphasis still remains on reducing consumption with a more efficient energy management programme. Understanding usage and monitoring consumption means ways to reduce a company’s carbon footprint can be identified which undoubtedly leads to some immediate savings. An on-going energy management programme delivers a more intelligent and intuitive approach to energy consumption which will continue to ensure the most cost effective use of energy and along with the implementation of smart technology means businesses can benefit from on-going savings.

In his blog, head of NPower Business Solutions David Reed said early signs suggest the UK will continue with many existing EU energy policies including meeting previously agreed targets to cut carbon emissions. However, he pointed out, the challenge for government is delivering often conflicting issues of securing the future energy supply, sustainability and affordability. Meanwhile, World Energy Council Trilemma Index for 2016, which ranks national energy systems according to sustainability, positions the UK at number 11.

A more flexible yet complex energy market and uncertainty over Brexit are understandably making business decision-makers nervous, but adopting a robust energy management programme today will almost certainly pay dividends in the short term and will create a more sustainable strategy for businesses going forward whatever policy in 2017 delivers.